FINANCIAL RULES & PROCEDURES

June 2005

The ASEAN Secretariat (ASEC)

70 A Jalan Sisingamangaraja
Jakarta 12110,
INDONESIA

Ten Nations One Community

 Financial Rules and Procedures

CONTENTS

Introduction

Chapters

1. Budgeting

2. Financial Controls

3. Receipts and Payments

4. Procurement and Acquisitions

5. Asset Management

6. Accounting System and Annual Audit

7. Special Interest Account

8. ASEAN Secretariat Capability Enhancement Fund

9. Management of Funds Held in Trust, including Bilateral and Multilateral Funds

Annexes

A. ASEAN Secretariat (ASEC) Table of Authority

B. Procedures for Recording of Receipts and Payments

C. Terms and Conditions for ASEAN Secretariat Staff Attending External

Training/Courses

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 Financial Rules and Procedures

Introduction

The ASEAN Secretariat Financial Rules and Procedures (AFRP) Manual is an integrated document
containing all applicable financial rules and procedures necessary for an efficient and transparent
financial management system at the ASEAN Secretariat (ASEC), with the appropriate internal
controls. The AFRP also covers regulations and practices not addressed in other ASEC documents.

The AFRP has been approved by the ASEAN Ministerial Meeting (AMM) and ASEAN Standing
Committee (ASC). The AFRP should be used by ASEAN officials and the staff of ASEC and other
ASEAN entities in the conduct of their activities. Where activities are not covered by the AFRP, the
Secretary-General (SG) of ASEAN may determine specific rules and procedures to cover such
activities; such rules and procedures shall be ratified by AMM upon the recommendation of ASC
and become an integral part of the AFRP.

The manual consists of a number of chapters, each covering a specific topic. Sub-headings and
titles have been included on the left of each section to facilitate easy reference.

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 Financial Rules and Procedures

CHAPTER 1: BUDGETING

Rule 1: Budgeting is the process of identifying revenues and expenditures

Definition based on a set of operational plans over a stated timeframe. The
budget should contain information about the categories of
proposed expenditures, the purpose for which they are made,
and the proposed means of financing them.

Rule 2: The annual budget of the ASEAN Secretariat (ASEC) shall cover a
Budget Coverage period known as the financial/fiscal year (FY) as defined in Rule
7, Chapter 6.

Rule 3: The Secretary-General (SG) shall prepare the budget proposal

Budget and submit it to the ASEAN Budget Committee (ABC) for
Preparation and evaluation, the ASEAN Standing Committee (ASC) for
Submission endorsement and the ASEAN Ministerial Meeting (AMM) for
approval. The submission shall include the justifications and
supporting documents in a format deemed appropriate by the
ABC.

The preparation of the budget for the subsequent FY shall start at

the beginning of January and be endorsed by the ASC by the end
of May of the current FY.

The SG shall issue a Budget Circular to all bureau/unit heads

containing the following guidelines:

a. Policies set/agreed upon by the AMM.

b. Overall strategies for achievement of policy objectives.
c. Programmes and projects approved for implementation by
the ASEC.
d. Budget ceilings in terms of funds, personnel and other
resources.
e. Timelines for submission of budget proposals.

The Head of Finance Unit (FIN) shall provide a standard

presentation format to guide the bureaus/units in their budget
preparations as an attachment to the Circular.

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Rule 3:
Budget Bureau/unit heads shall prepare their respective bureau/unit
Preparation and budget estimates, providing the rationale for programmes and
Submission projects and justifications for financial, personnel and other
(Continued) requirements. Key deliverables for each programme or project in
terms of quality, quantity, costs and benefits shall also be
presented.

The Head of FIN shall consolidate all bureau/unit budget

proposals and submit them to the ASEC Executive Committee
(ExCom) by the end of March.

The ExCoM shall evaluate all bureau/unit budget proposals and

finalise the ASEC budget for submission to the ABC by 15 April.

Rule 4: Budget estimates shall be stated in terms of United States Dollars

Currency of (USDs). Projected expenditures in the Indonesian Rupiah (IDR)
Denomination shall be stated in USD. The official IDR-USD exchange rate used
and Official in the ASEC budget and financial reporting shall be the rate used
Indonesian by the Government of Indonesia in the formulation of its State
Rupiah-United Budget.
States Dollar
(IDR-USD)
Exchange Rate

Rule 5: The estimated expenditures shall be broken down into four (4)
Expenditure separate headings:
Categories
a. Salaries and Allowances of Openly Recruited Staff (ORS).
b. Salaries and Allowances of Locally Recruited Staff (LRS).
c. Other Operating Expenditures (OOE).
d. Capital Expenditures (CE).

Rule 6: Where necessary, the SG may at his/her discretion prepare a

Supplementary supplementary budget for a given FY for the consideration of the
Budget ABC, the endorsement of the ASC and the approval of the AMM.
The supplementary budget shall include a full justification of the
need for additional resources arising from new, previously
unbudgeted, programmes, projects and other contingent liabilities
that have arisen during the FY.

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Rule 7: The SG shall have the authority to approve expenditures to

Ensuring the ensure smooth and uninterrupted operations of the ASEC in the
Continuity of interval between the end of a FY and the approval of the budget
ASEC Operations proposal for the next FY by the AMM. Such monthly expenditures
shall not exceed the average monthly outlay of the ASEC regular
budget of the preceding FY.

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CHAPTER 2: FINANCIAL CONTROLS

Rule 1: Financial controls are intended to:

Purpose
a. establish the accountability of the ASEAN Secretariat
(ASEC)s staff members who are charged with the
responsibility of managing programmes and projects;

b. ensure that resources are used for the purposes intended

by the ASEAN Ministerial Meeting (AMM) in amounts not
exceeding the appropriations approved;

c. ensure the proper, efficient and effective management of

resources;

d. safeguard the assets of the ASEC;

e. ensure the timeliness, accuracy and reliability of book-

keeping and financial reporting for effective management
decision-making; and

f. ensure compliance with applicable resolutions, regulations,

directives and formulated policies.

Rule 2: The Secretary-General (SG) is responsible for establishing and

Responsibility maintaining financial controls to ensure:

a. effective and efficient management of the ASECs financial

operations;

b. full disclosure of the financial position and results of the

operations of the ASEC;

c. consistency in budgeting and accounting classifications;

d. accountability for all funds and assets of the ASEC; and

e. preparation, execution and control of the ASEC budget.

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Rule 3: The ASECs expenditures shall not exceed the provisions of the
Expenditure budget as approved by the AMM. However, the SG is authorised
Control to approve virements of up to 15% in respect of each item of
and Virements recurrent expenditure from savings obtained from other
provisions, provided that the total approved budget is not
exceeded. Virements above 15% shall be made with the written
approval of the ASEAN Standing Committee (ASC).

Rule 4: Financial transactions shall be approved in accordance with the

Approving Table of Authority (TOA, Annex A).
Authority

Rule 5: The Head of Finance Unit (FIN) shall certify the validity of all
Certification and payment vouchers and the availability of funds before payment is
Fund Availability made. The SG may delegate this authority to another officer in
the absence of the above.

Rule 6: Payments shall normally be made by cash or via bank transfers.

Payment Modes However, the SG may allow exceptions, where appropriate.

Rule 7: All transactions in foreign currencies shall be converted into

Foreign Currency United States Dollars (USDs) at the official exchange rate agreed
upon by the ASEAN Budget Committee (ABC) at the beginning of
the FY. Profits and losses arising from such transactions shall be
recorded in the respective ASEC accounts.

Rule 8: The Head of FIN shall keep the SG informed of the results of the
Reporting operations and financial position of the ASEC at all times.

Rule 9: Losses of office funds, documents, equipment and property must

Losses be reported immediately to the SG by the staff member(s)
concerned. The report shall be in the form of an affidavit and
contain:

a. Place where the loss occurred.

b. Date and time of the loss as far as can be ascertained.

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c. Date, time and manner of discovery of the loss.

Rule 9: d. Particulars of items lost, including their original and
Losses estimated current value.
(Continued) e. Any other relevant information.

The SG shall include details of such losses, including, where

appropriate, the results of investigations, in his/her annual report
to the ASEAN Audit Committee (AAC).

Rule 10: Where a staff member is determined to be responsible for a loss,

Accountability he/she shall fully reimburse the ASEC. Negligence shall not be an
For Losses excuse for loss. Reimbursement may be made in kind, where
appropriate, or through deductions from the monthly salary of
the staff member concerned at an amount to be determined by
the SG.

Rule 11: Where criminal intent is suspected, the SG shall report the matter
Criminal Offences to the police and, if necessary, file the appropriate charges in a
court of justice.

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Annex A: ASEAN Secretariat (ASEC) Table of Authority

1. Payroll and Employee-Related Payments

Tasks/Types of Payments Designation/Title of ASEC Ceiling

Staff
Preparation of Payroll Finance Officer As Per Budget
Verification of Payroll Finance Supervisor As Per Budget
Approval of Payroll Head of Finance Unit (FIN) As Per Budget
Payment of Salaries and Head of FIN and Secretary-General As Per Budget
Allowances (SG)/Deputy Secretary-General
(DSG)
Approval of Travel Advance Head of FIN As Per Budget
Settlements
Approval of Employee Claims Head of FIN As Per Budget
(including Housing, Educational,
Medical, Transport, Overtime,
Etc.)
Payment of Employee Claims and Head of FIN and SG/DSG/Officer- As Per Budget
Allowances In-Charge (OIC)

2. Purchases

Tasks Designation/Title of ASEC Ceiling

Staff
Endorsement of Head of Unit/Bureau As Per Budget
Material/Service Requisition
Forms (MSRs)
Verification of MSRs Head of FIN As Per Budget
Approval of Miscellaneous Head of FIN Purchases of Up to
Purchases Using MSRs USD 200 or
Equivalent

Approval of Purchase Orders SG/Officer Designated by SG. Purchases of

(POs) Between USD 201
and USD 2,000
Approval of Quotations SG/Officer Designated by SG, the Purchases
Heads of FIN and Administration Between USD
Unit (ADMIN), and Requesting 2,001 and USD
Unit/Bureau or Their Respective 20,000
Designated Officers. They shall

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form the four (4) members of the

Quotations Panel (QP).
Approval of Tenders One (1) Representative Each from Purchases Above
Five (5) ASEAN Missions in USD 20,000
Jakarta, SG/Officer Designated by
SG, and the Heads of FIN and
ADMIN. They shall constitute the
Tender Committee (TC).

3. Bank Accounts

Tasks Designation/Title of ASEC Staff

Authorised Signatories for Two authorised signatories are required, one (1) each from
Cheques Categories A and B.
and Other Financial
Instruments The category A signatories are the SG, the two (2) DSGs
and two (2) most senior Bureau Directors.

The category B signatories are the other Bureau Directors,

designated Assistant Directors, and the Heads of FIN and
Trust Funds Unit (FUNDS).

Approval of Salary Payments Head of FIN and SG or one (1) of the DSGs.

Approval of Payment Vouchers Category A signatory.

Safekeeping of Cheque Books Finance Officer

4. Petty Cash

Tasks Designation/Title of ASEC Ceiling

Staff

Payment for Miscellaneous or Head of FIN Up to USD 10,000

Recurring Purchases or IDR 15,000,000

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Payment of Travel Advances Head of FIN Up to USD 10,000

or IDR 15,000,000

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CHAPTER 3: RECEIPTS AND PAYMENTS

Rule 1: Member Countries (MCs) shall remit at least one-half (1/2) of

Contributions their share of the approved budget for the new financial/fiscal
from Member year (FY) by 15 June of that FY.
Countries
The balance of their respective contributions shall be settled
within one (1) month after the consideration by the ASEAN
Standing Committee (ASC) of the Annual Financial Statements of
the ASEAN Secretariat (ASEC) for the previous FY.

MCs that are unable to remit their respective contributions within

the specified time frame, shall inform the ASEC in writing of their
proposed schedule for remittance for that FY by 1 September.
The ASEC shall coordinate with these MCs to ensure that their
contribution schedules allow for efficient and effective cash flow
management.

All contributions shall be acknowledged by Official Receipt (OR),

together with a cover letter.

The unexpended balance for a FY shall be deposited into the

ASEC Capability Enhancement Fund (ASCEF), the use of which is
specified in Chapter 8, Rule 1.

Rule 2: An OR shall be prepared in duplicate for each sum received by an

Other Receipts authorised Finance Officer. The Finance Officer who prepares the
OR shall enter the amount in words as well as in figures, and
ensure that the duplicate copy is legible. The OR shall bear the
date of the receipt of the money and shall be endorsed by the
Head of Finance Unit (FIN).

All ORs shall have pre-printed serial numbers.

A Receipt Register shall be maintained as prescribed in Annex B.

All cash or cheques received shall be deposited in the bank on

the day of receipt or on the following day.

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Rule 3: The FIN shall establish and maintain a Payments Register that
Payments records all relevant details of cash, cheques, transfer payments
and payment vouchers.

All bills/invoices/claims supporting payment vouchers shall be

date-stamped and contain:

a. date of receipt of the documents;

b. description of bill/invoice/claim; and
c. amount of the bill/invoice/claim.

The payment vouchers shall be the basis of all transfers. All

payment vouchers shall have pre-printed serial numbers. The
date of authorisation of payment shall be recorded in the ASEC
financial information system.

Payment vouchers shall contain full details of goods and services

supplied to allow proper verification. All supporting documents
shall be attached to the respective payment voucher. All
payment vouchers shall be certified by the Head of FIN (Chapter
2, Rule 5).

All bills/invoices/claims shall be paid within one (1) month of

receipt of the payment notice. If for any reason payment cannot
be made within this stipulated period, the payee shall be so
informed, together with the probable date of payment.

Rule 4: Opening and closing of a bank account shall be approved by the

Bank Accounts Secretary-General (SG).

In general, non-ASEC money shall not be paid into any ASEC

account.

Under no circumstances shall a bank account be over-drawn.

The Finance Officer shall keep all blank cheques safely and
maintain a cash book for each bank account.

All cheques and bank transfers shall be jointly endorsed by the

authorised signatories in accordance with the Table of Authority
(TOA, Annex A). All supporting documents shall be presented

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to the authorised signatories when they sign the cheques and/or

bank transfers.
Rule 4:
Bank Accounts Cheques shall not be prepared payable to the order of Cash or
(Continued) Bearer. However, the SG or Deputy Secretaries-General
(DSGs) may allow certain exceptions.

The transactions as reflected by the ORs and payment vouchers

recorded in the cash book shall be reconciled with the bank
statements.

A bank reconciliation statement shall be prepared as part of the

monthly financial statements.

Procedures for maintaining a Cheque Book Register are detailed

in Annex B.

Rule 5: Petty cash of Indonesian Rupiah (IDR) 15,000,000 and United

Petty Cash States Dollar (USD) 10,000 respectively shall be maintained. The
amounts shall be periodically reviewed to determine their
appropriateness in meeting the ASECs needs. The petty cash
shall be used for travel advances and other miscellaneous
expenses. Each disbursement from the petty cash shall be
approved by the Head of FIN.

The petty cash in IDR and USD shall be kept in a safe in the FIN.
A duplicate key of the safe shall be enclosed in a sealed
envelope, together with the combination of the safe written on
an index card, and deposited with the SG for safekeeping. The
combination of the safe shall be changed annually.

Replenishment of the petty cash shall be approved by the Head

of FIN and one (1) Category A signatory.

Two (2) petty cash books (one (1) each for USD and IDR) shall
be maintained to record all petty cash transactions.

Periodic spot checks on the petty cash balances and other funds
on hand shall be performed by an Assistant Director (ADR) or
higher level officer outside of the FIN. The checks shall be
performed at least once every quarter.

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Rule 6: Separation of duties of hiring, payroll computation and payment

Salaries of employees shall be established.
and Allowances
Rule 6: Once a staff member is recruited, a copy of the recruitment offer
Salaries and acceptance shall be sent by the Head of the Personnel &
and Allowances Training Unit (PT) to the FIN so that the payroll can be updated
(Continued) accordingly.

Each staff member shall furnish the number of a bank account to

the FIN to receive payment of his/her monthly remuneration. If
the staff member does not have a bank account, the PT shall
arrange for a local bank account to be opened for the new staff
member.

Payment of salaries and allowances to Openly Recruited Staff

(ORS) shall be made in USD. Payment of salaries and transport
allowances to Locally Recruited Staff (LRS) shall be made in IDR.

LRS salaries and allowances shall be paid on the 24 th of the

month and ORS salaries, on the 25th of the month. If such date
falls on a Saturday or Sunday, payment shall be made on the
preceding Friday. In the event that the designated payment date
falls on a public holiday, payment shall be made on the preceding
day.

Reimbursements of staff claims shall be paid twice a month, on

the 15th and the 30th of each month respectively. Overtime and
related allowances shall be paid on the 30 th of each month.
Claims for overtime, transportation and meals allowances by staff
members shall be endorsed by their immediate supervisors prior
to submission to the FIN. Claims for entertainment shall be
endorsed by their immediate supervisors and approved by the SG
or his/her designated officer prior to submission to the FIN.

Claims for reimbursements shall be submitted to the FIN within

45 days of the date of the bill/invoice. Late submissions shall not
be reimbursed.

Salaries shall be paid through bank transfers. Salaries may be

paid in cash, provided valid reasons are given. The ASEC shall
absorb the bank charges for salary transfers to one (1) bank
account per staff member. For monthly salary transfers to more
than one (1) bank account, the staff member shall bear the bank
charges for the additional account(s).

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A monthly payroll slip that includes the following items shall be

prepared for each employee:

Rule 6: a. basic salary;

Salaries b. allowances;
and Allowances c. employee claims (underpaid travel claims, overtime, and
(Continued) other overtime-related allowances);
d. deductions (employee receivables and overdue unsettled
travel advances);
e. net salary; and
f. employee bank account information.

Adjustments to staff compensation shall be notified by the PT to

the FIN at least one (1) week before the respective salary
payment dates to ensure that the adjustments can be made on
time.

An Annual Bonus, consisting of one (1) months salary, shall be

paid to:

a. Muslim LRS two (2) weeks prior to Lebaran; and

b. Non-Muslim LRS two (2) weeks prior to Christmas.

New LRS and LRS who leave the ASEC before the Annual Bonus
payment shall be paid a pro-rated Annual Bonus based on the
proportion of the FY that the staff member has been in the
service of the ASEC.

Rule 7: Requests for authority to travel shall be submitted by the Head of

Travel a Bureau/Unit in a memorandum (memo) to SG through the
Authorisation appropriate DSG. The memo shall state the following:

a. name of meeting/event;
b. purpose/justification for travel;
c. venue;
d. duration of meeting/event;
e. personnel attending meeting/event (including the duties
they are expected to perform);
f. source of funding (with supporting documents attached, if
not by the ASEC budget); and
g. other relevant information.

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The approved travel memo shall be the basis for approval of the
Travel Authorisation (TA).

Rule 7: A TA shall contain the following:

Travel
Authorisation a. name and nationality of person travelling;
(Continued) b. type of mission (scheduled ASEAN meeting, approved
project meeting, general conference/seminar or others);
c. date(s) of the event(s);
d. dates of departure and return;
e. routing of travel;
f. source(s) of funding; and
g. contact number(s)/address(es) at destination(s)

Based on the approved TA, the attending staff member shall

calculate the advance for Daily Subsistence Allowance (DSA) and
request for the issuance of an appropriate air ticket.

Unless otherwise authorised, SG is entitled to travel on First

Class; Deputy Secretaries-General (DSGs) are entitled to travel
on Business Class; and Directors (DIRs), Assistant Directors
(ADRs), Senior Officers (SOs) and others on Economy Class,
normally on non-endorsable tickets. Travel on endorsable
Economy Class is permitted only if routing and travel time
constraints do not permit travel on non-endorsable tickets. DIRs
and ADRs shall be permitted to travel on Business Class, if the air
travel time exceeds eight (8) hours.

All air ticket requests and routing for travel shall be booked by
the ASECs Travel Coordinator through designated travel agencies
on a rotation basis. Permission to use other than designated
travel agencies shall be allowed if it results in lower cost for the
ASEC and is approved by the Head of FIN.

All invoices for air tickets booked for official missions shall be
addressed to the Head of FIN.

Rule 8: Staff members on official mission outside of Jakarta shall be paid

Daily Subsistence DSA or per diem based on the United Nations (UN) International
Allowance or Per Civil Service Commission (ICSC) rate for the city where such
Diem/Advance meeting is held. The rates shall be updated at the beginning of

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Payment each year on 2 January.

If the ASEC or any other entity pays the hotel charges, only one
half (1/2) of the applicable DSA shall be paid to the attending
staff member.

Rule 8: The number of days for which DSA is paid shall be based on days
Daily Subsistence of mission plus up to two (2) additional travelling days. The
Allowance or Per number of qualifying travelling days may be adjusted on a case-
Diem/Advance by-case basis.
Payment
(Continued) Where a mission is sponsored by an external party and no DSA
has been paid, ASEC shall pay:

a. one half (1/2) of the applicable DSA, if the hotel

accommodation is covered by the sponsoring party; and
b. full DSA, if hotel accommodation is not covered by the
sponsoring party.

Where DSA is paid by an external party, the ASEC shall not pay
additional DSA to the attending staff member. Where DSA
provided by the external party is less than the ASECs rate, the
difference will not be paid by the ASEC.
Advances for DSA and other charges shall be prepared in the
prescribed form, supported by the approved TA.

Where the dates of the mission differ from those stated in the
TA, the staff member shall provide the necessary justification for
the variation.

A staff member attending external training/course shall comply

with terms and conditions set out in Annex C.

Rule 9: A detailed travel settlement report shall be submitted to the FIN

Settlement of within 14 days after the return from a mission or training/course.
Travel Advance In cases where a staff member has attended up to four (4)
consecutive missions back-to-back, the settlement report shall be
submitted within 14 days after the last mission. Where no
settlement report is submitted within the prescribed time, the
FIN shall deduct such travel advances from the staff members
salary in the following month.

The FIN shall process all properly prepared settlement reports

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Financial Rules and Procedures

within one (1) month of submission.

Upon settlement, the FIN shall update the staff members record
accordingly.

Annex B: Procedures for Recording of Receipts and Payments

1. A Receipt/Cheque Register shall be maintained to record the following:

a. Official Receipts (ORs)/cheque books received and their respective serial numbers.
b. ORs/cheque books issued and their respective serial numbers.
c. Date of issue and the person/organisation to whom/which an/a OR/cheque has been
issued.

2. All ORs/cheque books not in use shall be kept in a safe and the key and combination held
by the Finance Officer responsible for this function.

3. The Finance Officer shall verify and reconcile all receipts issued with the general ledger and
other accounting documents periodically.

4. All cheque books received from the ASEAN Secretariat (ASEC)s agent bank(s) shall be
checked upon receipt to ensure that no cheques are missing and that the cheque numbers
are in order.

5. Spot checks shall be performed periodically (at least once a year) by officers of Assistant
Director (ADR) level or higher from outside the Finance Unit (FIN) to ensure that the
receipts and cheque books are properly maintained.

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Annex C: Terms and Conditions for ASEAN Secretariat Staff Attending External
Training/Courses

The following shall apply to all staff of the ASEAN Secretariat (ASEC) attending external
training/courses:

1. Eligible staff members shall have completed at least one (1) year of service.

2. Proposals for training/courses shall be made through the Bureau Director/Head of Unit,
endorsed by the appropriate Deputy Secretary-General (DSG), and approved by the
Secretary-General (SG).

3. For training/courses of up to one (1) months duration the staff member shall undertake to
serve the ASEC for a minimum of one (1) year after the completion of the training/course.
For training/courses of up to two (2) months duration, the service period upon completion
shall be for a minimum of two (2) years.

4. Where the training is fully funded by an external party, the ASEC shall provide no additional
allowance during the training period.

5. Where course fees, lodging, and meals are provided by an external party, the ASEC shall
provide an allowance equivalent to 20% of the daily subsistence allowance (DSA) for the
city where the training/course is conducted and return economy airfare.

6. Where an external party pays only for the course fees, the ASEC shall provide
accommodation (dormitory/hostel), 50% of the applicable DSA and return economy airfare.

7. Upon successful completion of an approved training programme/course, it is the staff

members responsibility to submit a report on the training/course, outlining the name and
objective of the training/course, the training programme/course syllabus, the method of
instruction, his/her experiences during the training/course and how he/she thinks the
training/course has benefitted him/her and his/her work at the ASEC. He/she must also
prepare another report on the training/course material and hand in a copy of all
training/course materials within one (1) month of his/her return from the training/course to
the Personnel and Training Unit (PT).

8. The staff member shall, as far as possible, conduct the relevant training/course for other
members of the ASEC so that the knowledge and experience gained can be shared among
his/her colleagues.

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9. Where the staff member is unsuccessful in completing the training/course, he/she shall
provide SG with a written explanation of the reason(s) for his failure. SG shall have the
discretion to require the staff member to reimburse the ASEC for all costs incurred.

10. No provisions shall be made for the spouse, children or any family member of a staff
member enrolled in a training programme/course.

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CHAPTER 4: PROCUREMENT AND ACQUISITIONS

Rule 1: Each requisition shall be supported by a Material/Service

General Rule Requisition (MSR) form. The requisition shall be endorsed by
Head of Bureau/Unit concerned.

The Head of Finance Unit (FIN) is responsible for ensuring that

all procurement of goods and services are in accordance with set
procedures through tenders, quotations or open market
purchases.

Rule 2: The Head of FIN shall certify the validity of the MSR prior to its
Certification and approval, making sure that it has the appropriate endorsement
Approval and that the costs of goods/services requested have been
budgeted.

Rule 3: An approved MSR shall be the basis for the preparation of a

Purchase Order Purchase Order (PO) for all purchases costing USD 201 and
(PO) above. For purchases up to USD 200, the MSR is sufficient. All
POs shall be signed by the Secretary-General (SG) or his/her
designated officer. The Administration Unit (ADMIN) shall keep
two (2) copies of the approved PO for the follow-up of delivery
and record.

Rule 4: All purchases of goods and services shall be made in accordance

Types of with the following rules of procurement:
Procurement
a. Tenders for purchases above USD 20,000.
b. Quotations for purchases between USD 2,001 and USD
20,000.
c. Open market purchases for amounts of USD 2,000 and
below.
d. Purchases made with funds held in trust shall be subject
to the above rules, unless such funds have their own rules
of procurement.

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Rule 5: The Tender Committee (TC) shall consist of a Tender Committee

Tenders Secretariat (TCS) and one (1) representative each from five (5)
ASEAN Missions in Jakarta, with the office of the Director-General
(DG) of ASEAN-Indonesia considered as a Mission. The TCS
consists of SG or his/her designated officer, who shall chair the
TCS, and the Heads of FIN and ADMIN of the ASEAN Secretariat
(ASEC). TC membership shall rotate among the ASEAN Missions
in alphabetical order. The recommendation of the TC members
shall be submitted to the SG for approval. Invitations to the
ASEAN Missions in Jakarta to form the TC shall be sent out by
the TCS. The Chair of the TC shall be elected on the first day of
the Tender Committee Meeting (TCM).

Invitations to tender shall be given wide publicity to attract as

many bids as possible from bona fide vendors in order to obtain
the best bids. The Chair of the TCS shall decide on the mode of
advertisement to use.

The invitation-to-tender shall include the following:

a. title of tender;
b. specifications of goods/services required;
c. criteria for vendor qualification;
d. closing date of tender; and
e. other information deemed necessary.

The tender specifications and criteria for qualifying vendors shall

be determined by the TCS.

Upon receipt of the sealed tenders, the TCS shall do the

following:

a. open the Tender Box at the appointed closing date and

time;
b. prepare the list of tenders received; and
c. submit to the Chair of the TCS the tenders received for
safekeeping prior to the TCM.

The TCS shall prepare the following documents to facilitate the

decision making of the TC:

a. copy of invitation-to-tender advertisement;

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 Financial Rules and Procedures

b. copy of tender specifications;

Rule 5: c. list of tenders received; and
Tenders d. other information required by the TC.
(Continued)
The TCS shall maintain a record at the ASEC of all decisions
made during the TCM and furnish the TC members copies of the
meeting report within two (2) working days after it is held.

Rule 6: Quotations shall be obtained from at least three (3) registered

Quotations vendors/suppliers, for purchases between USD 2,001 and USD
20,000.

At least one (1) week's notice shall be given for potential vendors
to submit their quotations to ensure fair opportunity for
participation.

Call for quotations shall include the following:

a. title of quotation;
b. specifications of goods/services required;
c. criteria for vendor qualification;
d. closing date for quotation; and
e. other information deemed necessary.

A Quotations Panel (QP) shall consist of the SG or his/her

designate, who shall chair the QP, the Heads of FIN, ADMIN and
requesting units/bureaus or their respective designates.

All quotations shall be submitted in sealed envelopes addressed

to the Chair of the QP for safekeeping until the agreed quotation
opening date and time.

Following the opening of the quotations, the QP shall recommend

the most appropriate vendor for the approval of SG or his/her
designate. The vendor shall be selected based on price,
reliability, capability, reputation and ability to adhere to delivery
schedules.

The ADMIN shall prepare a PO, attaching the following:

a. invitation to quote;
b. specifications of goods/services to be purchased;
c. list of quotations received; and

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 Financial Rules and Procedures

d. other information relevant to the PO.

Rule 6: Variations to a PO shall be endorsed by the SG or his/her

Quotations designate.
(Continued)

Rule 7: A formal contract shall be duly signed by the SG or his/her

Service Contracts designate for services provided over a certain period of time.
The terms of the contract shall be clearly specified to ensure
effective management of the contract.

Rule 8: The ADMIN shall keep an updated list of vendors that details the
Master List of characteristics of each vendor (e.g., company profile, tax
Vendors registration number, reliability, reputation, distinction between
each vendor and the ASECs experience with the vendor).

Rule 9: A periodic review (at least once a year) shall be performed for
Pricing Review every vendor, including vendors providing travel services, to
obtain the best quality services/materials at the lowest prices.

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CHAPTER 5: ASSET MANAGEMENT

Rule 1: A fixed asset consists of an item costing USD 500 and above that
Definition of a has an economic life of more than one (1) year or a material
Fixed Asset repair of the same amount that extends the economic life of a
fixed asset by at least one (1) year.

Expenditures on fixed assets, including material repairs that

extend the economic life of a fixed asset shall be capitalised.
These expenditures may be paid by the ASEAN Secretariat
(ASEC) or other entities on behalf of ASEC.

Rule 2: A separate account shall be set up for each type of fixed assets.
Recording and
Classification Staff members shall be responsible for the safeguarding the
office equipment and other assets assigned to them in the course
of their work, and ensuring that they are kept in good working
condition. They shall be held accountable for any loss of or
damage to the equipment or assets assigned to them.

The Finance Unit (FIN) shall maintain a Fixed Assets Register

(FAR), which shall include:

a. classifications of the fixed assets;

b. descriptions of each fixed asset;
c. acquisition dates;
d. acquisition costs;
e. details on depreciation;
f. net book values of fixed assets;
g. the locations of the fixed assets;
h. identification numbers;
i. names of custodial staff members; and
j. dates and means of disposal and the prices obtained at
disposal, where applicable.

Donated fixed assets shall be distinguished in the FAR.

This register shall be updated periodically or whenever

necessary.

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 Financial Rules and Procedures

Rule 3: An identification number shall be assigned to each item of fixed

Annual asset and tagged onto the asset.
Stocktaking
The Administration Unit (ADMIN) shall be responsible for
preparing a complete inventory list of the ASECs fixed assets.
The ADMIN shall also prepare an inventory list of fixed assets for
every location on the ASEC premises, including offices, meetings
rooms, library, canteen, etc.

The ADMIN, assisted by the FIN, shall take stock of the ASECs
fixed assets at the end of each financial year (FY) to verify the
existence and condition of fixed assets on the ASEC premises.
The result of the stocktaking shall be used to update the FAR and
respective inventory lists.

Rule 4: Requests for fixed assets or additions to fixed assets shall be

Additions of checked against the budget and approved by the Secretary-
Fixed Assets General (SG).

Such additions shall be properly classified and recorded in the

FAR and respective inventory lists.

Rule 5: The ADMIN shall regularly prepare a List of Fixed Assets

Disposal of Fixed Designated for Disposal. This list shall include all assets that:
Assets
a. have no remaining economic life;
b. are redundant; and
c. are beyond repair.

The procedures for disposal of fixed assets shall be:

a. Fixed assets that have no book value or donated assets

that are no longer suitable for use by the ASEC shall be
disposed of on approval by the SG or his/her designate.

b. Fixed assets such as furniture and office equipment shall

be disposed of by way of tender, subject to the prior
approval of SG or his/her designate.

c. Large ticket fixed assets, such as motor vehicles, shall be

disposed of by way of tender with the approval of the

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 Financial Rules and Procedures

Board of Survey (BOS). The BOS shall be composed of

Rule 5: representatives of the office of the Director-General (DG)
Disposal of Fixed of ASEAN-Indonesia and the ASEC as permanent
Assets members, and one (1) representative each from two (2)
(Continued) other ASEAN Missions in Jakarta. The two (2) permanent
members and two (2) invited members shall constitute a
quorum. The BOS shall consider the method of disposal
and the sale price of the fixed assets. The ASEC shall
carry out the disposal of the fixed asset with the approval
of the BOS.

The ADMIN shall invite interested parties to put in sealed bids on

the fixed assets to be disposed. Bids received in sealed
envelopes shall be kept in the custody of the ADMIN prior to the
opening of the bids. The bids shall be opened by the panel,
consisting of a Deputy Secretary-General (DSG), Heads of FIN
and ADMIN, and at least one (1) ASEC professional staff
member. The panel shall select the winner. The ADMIN shall
inform the winner of the result of the tender and arrange for
delivery of the asset(s) to be disposed and the mode of payment.

Upon disposal of the fixed asset(s), the FAR and inventory lists
shall be updated accordingly. The gains/losses arising from the
disposal shall be properly recorded by the FIN.

Rule 6: Depreciation of a fixed asset shall start on the acquisition date of

Depreciation the fixed asset.

Depreciation of a fixed asset shall be calculated, using the

straight line method, on the basis of the economic life of the
fixed asset as follows:

a. Building improvements (10 years).

b. Vehicles (5 years).
c. Machinery and equipment (5 years).
d. Telecommunications system and computers (4
years).

Rule 7: The ADMIN shall ensure all fixed assets are adequately insured,
Insurance where necessary and appropriate.

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 Financial Rules and Procedures

CHAPTER 6: ACCOUNTING SYSTEM AND ANNUAL AUDIT

Rule 1: The ASEAN Secretariat (ASEC) accounting system encompasses

Definition the rules, methods and procedures that are used to record,
classify, and report information on the financial position and
operations of the ASEC, and any other funds managed by the
ASEC. It shall be an integrated part of the ASECs overall
planning, budgeting, control and reporting system.

Rule 2: The ASEC accounting system consists of receipt and payment

Accounting cycles. Receipt cycles include the recognition and recording of
Cycles contributions from Member Countries (MCs) and other revenues,
such as interest income, while the payment cycles include the
recognition and recording of advance payments and payments to
suppliers and staff members.

Rule 3: The Head of Finance Unit (FIN) is responsible for ensuring that
Responsibility an efficient and effective accounting system (including all the
documents and records) is established and maintained for the
management and control of the ASEC Regular Budget (ARB).
This is to ensure:

a. accurate and proper reporting of the financial operations

and position of the ASEC and any other funds under its
management; and

b. proper expenditure in respect of the approved budgets.

The Head of Trust Funds Unit (FUND) is responsible for ensuring

that an efficient and effective accounting system (including all
the documents and records) is established and maintained for
the management and control of the funds held in trust by ASEC.
This is to ensure accurate and proper reporting of the financial
operations and position of each trust fund (TF).

Any deviations from established policies and procedures shall be

reported to the Secretary-General (SG).

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 Financial Rules and Procedures

Rule 4: The ASEC accounting system shall use the accrual basis of
Accounting Basis accounting and be in accordance with Generally Accepted
Accounting Principles (GAAP).

Rule 5: No figures shall be erased in any accounting document or record.

Alterations and If any alteration is necessary, the original figures shall be crossed
Erasures through in such a way as to show the figures originally entered
and the correct figures shall be written above the cancelled ones.
The alteration shall be signed by the officer making the
correction.

Rule 6: A receipt, voucher, cheque, or payment order which has been

Cancellation and spoilt or cannot be issued for any other reason, shall be clearly
Loss of Records marked cancelled across all copies, signed by the responsible
officer and retained. There shall be no alterations to cheques
and payment vouchers. In case of error, the whole document
shall be cancelled and a fresh one prepared.

The loss of any accounting record shall be reported to the SG,

who shall, in turn, report it to the Chair of the ASEAN Standing
Committee (ASC).

Rule 7: The ASECs financial year (FY) is from 1 June of each calendar
Financial Year year to 31 May of the following year.

Rule 8: The monthly financial statements (FS) of ARB and TFs shall
Financial include:
Statements
a. Statement of Financial Position;
b. Statement of Revenue and Expenditure;
c. Statement of Cash Flow;
d. Summary of Transactions, including an analysis of the
year-to-date actual and budgeted expenditures;
e. Notes to the FS and Summary of Transactions; and
f. Other financial reports as deemed necessary by the SG.

The monthly FS shall be approved by the SG and submitted to

the Chair of the ASC with copies to the Directors-General (DGs)

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 Financial Rules and Procedures

of ASEAN Member Countries (MCs) within 15 working days of the

following month.
Rule 8:
Financial The annual FS shall be prepared and submitted to the Chair of
Statements the ASC in accordance with the regulations concerning auditing
(Continued) of the accounts, within three (3) months after the end of each
FY. This statement shall be used as the basis for the audit of the
accounts of the ARB and TFs.

Rule 9: The accounts of the ARB and TFs shall be audited by the ASEAN
Audit Audit Committee (AAC) within six (6) months after submission of
the annual FS to the Chair of the ASC.

Rule 10: The annual FS and their supporting schedules as required by the
Audit Documents AAC shall be submitted to the Chair of the AAC. The FIN and
FUND shall ensure that the accounting records are made
available for the AAC.

Rule 11: The SG is responsible for ensuring that all audit queries by the
Audit Query AAC are answered not later than one (1) month from the date of
query.

Rule 12: The report of the AAC, together with the audited FS, shall be
Audit Report submitted to the ASC, which shall, in turn, submit its report to
the next ASEAN Ministerial Meeting (AMM).

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CHAPTER 7: SPECIAL INTEREST ACCOUNT

Rule 1: The Special Interest Account (SIA) of the ASEAN Secretariat

Background (ASEC) comprises the interest income from various funds and
accounts of the ASEC accumulated over the years, which have
since been discontinued.

Rule 2: The Secretary-General (SG) shall be authorised to use the SIA to

Authority and meet any unforeseen or urgent unbudgeted expenditure that are
Responsibility incurred by the ASEC.

The SG shall be responsible for the proper use and control of the
SIA, ensuring that the following guidelines are followed:

2.1 It may be used to cover shortfalls in the ASEC Regular Budget

(ARB) where the SG is satisfied that the agreed contributions
of Member Countries (MCs) would not be received on time
and/or the balances in the other accounts of the ARB are
insufficient to meet the needs. Any amount thus drawn from
the SIA shall be restored when the funds for the ARB are
available.

2.2 The SIA shall not be used for any of the following purposes,
unless specifically and duly approved by the ASC:

a. Projects which come under separate funding

arrangements or are funded from specific grants.

b. Travel, accommodations and other expenses of delegates

attending ASEAN meetings and events, unless they are
approved by the ASC.

c. Expenditures of a capital nature that may be met from the

ARB or the ASEC Capability Enhancement Fund (ASCEF),
such as those which may be needed to improve the
infrastructure of the ASEC premises, e.g., renovation of
the premises, upgrading of the security camera system,
servicing of the air-conditioning system, etc.

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 Financial Rules and Procedures

Rule 3: The accounting principles stated in these financial rules and

Accounting and procedures shall be applied to the recording of SIA transactions.
Auditing
The transactions of the SIA shall be reported in the monthly and
annual financial statements (FS) of the ASEC.

The SIA shall be audited as part of the ASECs annual audit.

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 Financial Rules and Procedures

CHAPTER 8: ASEAN SECRETARIAT CAPABILITY

ENHANCEMENT FUND

Rule 1: The ASEAN Secretariat Capability Enhancement Fund (ASCEF) is

Background established to fund the repair, upgrading and enhancement of
the ASEAN Secretariat (ASEC)s premises, machinery and
equipment, and other capital expenditures that is not provided
for in the ASEC Regular Budget (ARB). It consists of the
accumulated surpluses of the ARB from previous financial years
(FYs).

Rule 2: The authority for the use of the ASCEF is vested in the Secretary-
Authority and General (SG), who shall draw on it when necessary.
Responsibility
The ASCEF shall not be used for expenditures under the
approved ARB.

Rule 3: The accounting principles stated in these financial rules and

Accounting and procedures shall be applied to the recording of ASCEF
Auditing transactions.

The transactions of the ASCEF shall be reported in the monthly

and annual financial statements (FS) of ASEC.

The ASCEF shall be audited as part of the ASECs annual audit.

Rule 4: Where the balance of the ASCEF exceeds 20% of the current FYs
Application of the ARB at the end of that FY, the excess may be applied to
Excess in the financing the next FYs ARB. Such application shall be
Balance of the recommended by the ASEAN Budget Committee (ABC) and
ASCEF to the endorsed by the ASEAN Standing Committee (ASC).
ASEC Regular
Budget

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CHAPTER 9: MANAGEMENT OF FUNDS HELD IN TRUST,

INCLUDING BILATERAL AND
MULTILATERAL FUNDS

Rule 1: Trust Funds (TFs) are established for specific purposes and
Background and objectives. They include bilateral and multilateral funds that are
Disbursement provided by donor countries, organisations or institutions to
Authority finance specific ASEAN programmes and projects.

The usage and accountability of TFs shall comply with their

respective guidelines. The terms of each fund specify the
purpose, approved programmes and projects, management
structure and functions, and disbursement, accounting and
reporting procedures. The Secretary-General (SG) is responsible
for ensuring that each such fund is managed in accordance with
the set rules and procedures. A detailed budget must be
submitted to the appropriate fund management committee for
approval and allocation of funds.

Disbursements from TFs shall be made upon the presentation of

disbursement requests duly approved by the SG or his/her
designate in compliance with the respective TF guidelines.

Each TF shall have its own bank account, which shall be distinct
from the accounts of the ASEAN Secretariat (ASEC) Regular
Budget (ARB).

Rule 2: Separate ledgers shall be kept and monthly and annual financial
Accounting and statements (FS) shall be prepared for each TF, according to the
Auditing rules laid down in Chapter 6. The transactions of each TF shall
be also recorded properly in compliance with its specific
guidelines. In addition, reports on progress and financial position
of each bilateral and multilateral fund shall be prepared
periodically or as frequently as requested by their respective fund
management committees.

Rule 3: The designated desk officers of the projects financed by the TFs
Project Reporting shall be responsible for monitoring all projects funded by the TFs

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 Financial Rules and Procedures

and preparing monthly progress reports of those projects. The

Rule 3: reports shall include:
Project Reporting
(Continued) a. name of project;
b. name/source of funds;
c. project proponent;
d. name of focal point and/or desk officer;
e. location of project implementation;
f. project commencement and estimated completion dates;
g. amount approved for project;
h. date/schedule of fund disbursement;
i. project status;
j. date(s) of receipt of project status report(s); and
k. actual amount expended, amount to be refunded and date
of receipt of refund (for completed projects).

The reports shall be subject to the additional reporting

requirements of the respective TFs.

Any unexpended balance shall be returned to the respective TFs

within sixty (60) days of the completion of the project.

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